Tax Day: What’s Up With Mitt’s Extension?

Today is the day to file your tax return and pay the government any money you owe it—we all got two extra days, thanks to Sunday and a local D.C. holiday—unless, like Mitt and Ann Romney, you have filed with the I.R.S. for an extension. In that case, you still have to pay however much you think you owe, but you don’t have to file an actual 1040 until six months after the normal April 15th deadline. Consequently, the Romneys now have until three weeks before the election to complete their return.

Confirmation that Romney had filed for an extension came on Friday evening—the point in the weekly news cycle when politicians traditionally release bad news. Naturally, the timing provoked suspicions that Romney was trying to hide something about his finances. Maybe he is—his campaign has refused to say exactly how much he is worth—but it seems unlikely that this was his reason for seeking an extension.

Back in January, Romney released his full tax return for 2010, when he and his wife earned $21.7 million, which was more than two hundred pages long. At the same time, he released an estimate of his tax return for last year, when he and Ann earned $20.9 million. Although not as detailed as the 2010 return, this (http://www.washingtonpost.com/wp-srv/politics/documents/romney-2011-estimated-1040.html) ran to more than ninety pages.

If there are things Romney is trying to keep to himself, they are unlikely to be found in his tax return, whenever it is finally published. Romney knew full well in 2011—and 2010, for that matter—that he would be expected to release his tax returns. It’s safe to assume that he arranged his finances in a manner most capable of withstanding public scrutiny.

Why, then, did he bother to ask for an extension? One likely reason, which his campaign cited, is that he doesn’t yet have all the financials details necessary to file a full return. As an investor in private-investment partnerships, Romney probably receives notice of precisely how much money he has made considerably later than most people do. Rather than sending out the standard W-9 forms, which many self-employed people rely upon to report their income, investment partnerships send out K-1 forms—and often they don’t do so until the second or third quarter of the year following the tax year in question. To avoid being hit with penalties, the wealthy folks who are affected by this practice routinely file for extensions, often basing their estimates on preliminary information provided by the partnerships. According to Romney’s campaign, he and his wife have done this in previous years.

Of course, Romney could have updated the 2011 information that he released in January and put it out there for all to see, specifying it was still preliminary. But there wasn’t really anything to be gained from doing so. Although the actual news value of the 2011 return would almost certainly have been minimal, its very existence would have prompted another flood of stories about the absurdly low tax rate that the Romneys face—13.8 per cent in 2010 and an estimated 15.2 per cent in 2011.

At a moment when the Mittster is desperately trying to put the primary race behind him and reboot his campaign, that was the last thing he needed. Much better to take a bit of heat over filing for an extension and subsequently release the tax return when it will cause the least amount of damage. Over to Chris Cillizza, at The Fix, who covered this admirably yesterday:

The campaign’s vagueness about when they might release the returns is intentional. It gives them considerable wiggle room to pick the right time—aka when no one is around or paying attention to politics—to put the returns out. (Early August, anyone?)

Put simply: The Romney team knows that the candidate’s tax returns are a political loser for them. The best way to deal with losing issues is minimize them to the greatest extent possible. Filing for an extension—whether that was by necessity or born of political calculation—to release his returns allows Romney to handpick that moment.

Romney’s taxes are going to be an issue all the way until election day. There is nothing he can do about that. But, at least for now, he isn’t going to give the Democrats any help in exploiting it.

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As the years passed, Tom grew more entrenched in his homelessness. He was absorbed in lofty fantasies and private missions, aware of the basest necessities and the most transcendent abstractions, and almost nothing in between.